Herein we have explored the highly efficient and environmentally benign clay mineral, Fe(III)–montmorillonite [Fe(III)–Mt], for adsorption of methylene blue (MB) dye from aqueous solution under ambient conditions. The Fe(III)–Mt was interacted with MB dye solution at different pH, temperature and solid-to-liquid ratio. The concentration of MB dye removal was estimated from its optical density at λmax = 665 nm using UV–Vis spectrophotometer. The MB dye removal was rapid at basic pH and increases with temperature up to 40 °C. A complete reduction (100%) was occurred in about 7 min at pH 7 and 10 while at pH 3 in about 10 min. The time taken for complete reduction at 0, 30 and 40 °C are 10, 7 and 5 min respectively. The removal followed by adsorption of dye molecules on the spent clay mineral was evident from FESEM/EDX analysis. More importantly, Fe(III)–Mt could be separated and retrieved easily after the reaction by centrifugation from the degraded MB dye solution. The experimental results of MB dye removal from Fe(III)–Mt follows the pseudo first order kinetics. This study reveals that Fe(III)–Mt has the potential to be used as reductant/adsorbant to remove cationic pollutants effectively and rapidly from drinking water and large scale of industrial wastewater.